How-to Guides

How to Price & Profit from Your e-Design Services

January 31, 2019

By Sheilah MacSporran

Video Transcription:

Hi everyone. Sheilah here from DesignFiles. In today’s video we’re going to be discussing how to price your e-design packages. So we’ve definitely had a lot of requests from designers who are interested in learning more about this topic and there are absolutely a few key elements that you’re going to want to keep in mind when you’re trying to determine the appropriate price for your design packages. So we’ll be getting into that in full detail throughout this presentation, but before we jump into that, there is one thing that I want to address right out the gate because it’s the number one question that we receive from designers all the time when they’re thinking about kick starting into an e-design business. And that question is, how do I compete against the larger e-design companies that are offering extremely low design package rates? And to that I say, you don’t have to. You absolutely do not have to compete with these companies on price point.

And here’s why. Number one, you need to ensure that you are compensated for every hour that you work. This is a business first and foremost, so if you’re not getting paid for every hour that you work, what’s the point? And if you’re trying to compete against companies, the larger companies that are out there, some of these companies are offering design packages at 59 dollars for a design or 79 dollars for a design. So that means that you as a designer, you’re going to have to complete all the deliverables in that package in under an hour if you want to walk away with even a tiny profit. So I would definitely consider not trying to compete against these companies when it comes to price point because inevitably, you’re going to end up working additional hours that you’ll never get paid for. Instead, you want to make sure that you’re compensated for every hour that you work.

And two, you want to work with clients that understand that your expertise is worth more. So while there is a large audience of potential clients out there that are looking for those really low price packages, there’s also a large audience out there that are looking for more of a handheld and personalized service than what they can get from some of the larger companies, and they are willing to pay more to ensure that they get the right designer for the job. That’s the audience that you want to target for your e-design business. You’re going to be able to raise your rates, and you’ll be able to work with less clients and earn more.

So if there is one thing that I can just address in and get across for this whole presentation, the one thing that I just want to do is get rid of this notion that e-design equals cheap design. It doesn’t. E-design is simply another way to offer design services. And this way you’re just tapping into a tech savvy crowd, and they just like working with designers online. That’s it. So with all that said, let’s get into how you can determine the appropriate price for your design packages. And some of the best advice that I’ve seen out there comes from Chaney Widmer from Mix and Match Design Co. Now Chaney has been a successful e-designer for years now, and she actually helps designers create successful e-design businesses for themselves. So this lady does know what she’s talking about.

So there are four questions that she definitely recommends you ask yourself when you’re trying to determine your pricing for your e-design packages. The first question is, how much experience do you have? So if you’re just getting started, you’re obviously not going to be charging the same rates that somebody is going to charge if they have 10 or 15 years of experience behind them. So just keep that in mind and try to gauge the rate that you’re going to charge based on your experience. Number two, what are you offering in your design packages and how long does it take you to complete the designs and the deliverables? So this, you definitely want to spend some time thinking through because this is how you’re going to ensure that you are compensated for every hour that you work. Three, you want to ask yourself how much you need to earn this year in order to meet your financial goals and definitely don’t forget to factor in your expenses. And four, is your revenue driven only by how much you charge for your time or do you have additional revenue coming in from product markups or commissions?

So these are the four questions that you want to ask yourself and when you start putting answers to these questions, it’s really going to help you determine the type of design services that you’re going to be providing and how to charge for those design services. And if you’re still feeling a little bit lost, sometimes it’s best to just start at the end and work your way back. So how much do you want to make this year? Ask yourself that question. It might be a case where you want to just bring in an extra 20 or 25K to boost the revenue that you currently earning from your full service interior design offerings, or perhaps you want to go 100 percent e-design, and you’re looking to make a much larger number, maybe you’re looking to make 75K. Whatever that number is, start with that and then you can determine how many design packages you’re going to need to sell to meet that financial goal.

So when you’re determining how to set up your design packages, you definitely first need to consider all the design deliverables that you want to include within those packages and how long it’s going to take you to complete each deliverable. I did put together a list here of potential deliverables that you can include within your design packages. They are by no means what you have to include. We’ll just go through the list and then you can determine what it is that you want to include within your packages. Now, the first one that I have here is an introductory phone call or email to discuss the project. And what I like about adding this particular deliverable into your design package is that right out the gate it says to a client that this is a designer who is willing to get to know you, you’re going to get to talk to a human being, you can discuss the project, you can get to know each other, and it’s just going to set off the entire project on the right foot. So it’s something that I would definitely recommend building into your package.

You do want to include a set number of concept boards that you’re going to be providing to your client, and you want to be really clear on the number of concept boards that they can expect to get from you. So if they’re paying for a service, there should be no question about what they can expect to receive from you when they read those design deliverables. Now, another item that you might want to include within your deSign packages is the opportunity to allow your client to provide feedback. So there’s definitely a lot of e-design services out there where they don’t actually give the client a chance for revisions, or a chance to provide feedback. And my concern with that is that from a client’s perspective, if they pay for a design package, they get their design board from you and maybe they love 80 percent of it, but they want to make a couple of changes. But at that point there was no chance for revisions, and they’re walking away a little bit sour because they didn’t really get what they wanted from that package.

So at the end of the day, we live in a world where ratings and reviews can make or break a company. So I would definitely not want to put together a package where I’m potentially setting myself up to have a client walk away feeling like they didn’t get what they want. I would just build in the extra time to include rounds of revisions and that way your clients going to walk away happy because they were able to talk to you, get the revisions they wanted and now they’ve got their ideal space. And you’re going to be happy because you’ve got a happy client on the other end. A happy client is a returning client, and it’s also a client that’s going to refer you to other friends and family. So I would definitely consider including that in.

Now, you are going to want to include a final design board, and I’m just going to exit out of this presentation here, so we can go over a couple examples of the types of design boards that you can include. So let’s just jump over to this project here. Now, you can include design boards that are more of a 3D design board, like the one you’re seeing on the screen right now, or you could choose to include more of a simple 2D concept board, like this one right here. It’s completely up to you on how you want to put together your design boards. But with that design board, you also want to include the full product list. Now, if you’re using your design files account to offer up your e-design services, the great news is, is that when you save that design board, your full product list is automatically generated.

So you actually don’t have to spend time putting together this deliverable, and it will include every item that you added to your design board, full product details, sharp links, quantities needed, and the overall cost for this design. If you’re going to be the type of designer who wants to allow your client to shop to look themselves, that’s fine. You can leave the product list as is, and they can click on any of these shops links and be redirected to the retailer where they can purchase the item. Or if you’re the kind of designer who wants to include an additional service in your e-design package where you’re going to handle the ordering of the product, then go ahead, build that into your package and charge more because that’s a service that you’re taking care of. And again, if you’re going to be using your design files account, you do have the option to go ahead and replace those shop links with approve and reject buttons, and you can hide any specific product details from your client if you don’t want to allow them to shop the look.

Now, aside from your product list, the other key thing that you might want to include with any your design deliverables is an itemized floor plan. So the great thing about offering an itemized floor plan is that when all these products arrive at your client’s door, you basically want to provide them with a roadmap for how they’re going to put this whole room together. And while it might be obvious to you as a designer for how all these furniture pieces are going to be laid out within their space, it’s not necessarily obvious to your client. So you want to give them a quick and easy roadmap that they can follow so that they can put this space together and not feel confused or annoyed that it’s not coming together in the way that you had envisioned.

And if you like, you could go one step further and include another deliverable in your design package that is basically a how to guide with designer notes. So the floor plan is a fantastic thing to have, but if you’re recommending artwork that’s going to get hung on the wall, maybe consider including a little how to guide for how that artwork is going to get laid out on the wall. Or if you’re suggesting a light fixture that’s going to go over the dining table, indicate to your client how low that light fixtures should hang so that they are able to basically put this entire space together as if you were there with them. That is the end goal as an e-designer, if you can basically give your client all the information they need so that they can put that space together as if you were there to help them. You are absolutely offering an excellent e-design experience. So I’m just going to jump back to our presentation, and we’ll continue on.

Okay. So once you have finalized all the deliverables that you want to include within your design package, the next thing that you want to do is start testing out how long it takes you to complete those deliverables. So don’t just pull a number out of the air and say, okay, this is going to be the price point for this package. You want to test out how long it’s going to take. And don’t just do one round, do a few rounds, and then from there you can take the average number of hours that it takes you to complete those deliverables, multiply that by your hourly rate, and that is the price for your design package. That’s how you’re going to ensure that you’re paid for every hour that you work.

And when you have that set up, now it’s time to test it out with your clients. So add your packages to your design files, packages page. Add your packages to your website, announcing your new services to your clients and drive them in. From there, you want to start paying attention. Your goal right now is to take in as much information as you can get, so start taking note of which packages are drawing more clients, which packages are not really getting the attention from the clients and try to determine what the patterns are so that you can better gauge the changes that you need to make to your packages to continue to improve your offering and never ever, ever be afraid to make changes. It’s the one thing that you should constantly be doing in your design business to always improve and work towards a more successful business.

That’s what we do with DesignFiles. We’re constantly changing the messaging on our homepage. We’re constantly updating the features that we offer, and we’re constantly reaching out to our designers to make sure that what we have is what you guys actually need. So consider reaching out to your clients. Why not? It’s not going to hurt at all. Reach out to your clients and just ask them, what do you really need from an e-design service? What are you looking for? And then you can start making changes to ensure that the packages that you’re offering is exactly what your clients are looking for. So with all of that said, now it’s time to get to work. If you have already created design packages, go back and review them. Just give it a test run. See if the price point that you’ve set for that package actually gives you enough time to complete that package.

And if it doesn’t, start adjusting your pricing or start pulling out deliverables and narrow down your a package to a few key deliverables that you want to offer. And if you don’t have any design packages set up right now, that’s fine. Let’s start building them out now. So consider offering up a couple of design packages to begin with. So again, let me just exit out of this particular presentation here, and we’ll jump over to a couple of sample packages. So you might want to start out with a design standard, and you’re just going to set a certain price on a per room basis and include in your deliverables that you want to offer up. Aside from that, you might want to offer up a second package where maybe it’s a multi room package, and you’re technically giving your clients a bit of a discount because they’re buying into two rooms instead of just buying one.

So you could start out by creating a couple of packages like this and basically just putting in the individual deliverables that you want. Always test it out, see how long it’s going to take you to complete it, and make sure your price point is covering all the hours that you need to work. If you have any other questions about setting up your design packages, if you feel like you’re still a little bit unsure, reach out to us on the live chat. We’re always here to help. We’re happy to talk through any of your design packages and what you want to offer in your business and just help you get that set up and ready to go. So reach out to us if you have any questions at all. And now, as always, thanks so much for watching.

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